Gold's recent pullback has spooked a lot of retail traders, but hedge fund manager Raphael Lamm says don't panic - this is just noise.
Gold fell back to around $4,400 an ounce this week after hitting a record near $5,595 earlier this year, pressured by stronger-than-expected US jobs data and rising bets that the Federal Reserve could actually hike rates again. The market is now pricing about a 60% chance of a Fed hike in September, up from 50% before the data.
Lamm, who has been bullish on gold since early 2025, calls the drop a technical correction, not the end of the bull market.
"This is a tactical pullback, not a structural break," Lamm said in a note to clients. "The long-term drivers for gold are still intact."
He points to three reasons why the drop won't last:
*1. Central banks are still buying*
Global central banks are still buying gold at historically high levels to diversify away from fiat. That creates a solid floor under prices. Even UBS noted this week that demand from central banks is preventing a full-scale collapse.
*2. Liquidity is the real driver, not rates*
Lamm argues the correlation between gold and real interest rates broke down in 2022. Now gold is tracking global liquidity. When global M2 money supply growth hit 12% earlier this year, gold hit its peak. As M2 growth pulled back to 7%, gold fell to $3,959, but Lamm thinks that move was an overreaction.
*3. The big money is buying the dip*
Some of the world's largest asset managers - Amundi, Pictet, Robeco and Fidelity - which manage over $27 trillion combined, have all rebuilt gold positions after the drop. Amundi bought expecting gold to return to $5,000 by end of 2026. JPMorgan is still holding a $6,300 target, and Goldman Sachs has $5,400.
"Gold is cheap, a good hedge and reasonably liquid," as Amundi's head of cross-asset put it.
Lamm agrees. His view is that we will see gold consolidate between $4,500 and $4,800 in the near term due to volatility and higher Treasury yields, but once the Fed path becomes clearer and rate cuts return - which most expect twice this year - momentum will come back fast.
His advice: the fear right now is dominating, but history shows gold cycles only end after a profound structural shift. That shift is not in sight yet.
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